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Constraints on Trade in the MENA Region

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  • Rina Bhattacharya
  • HirutWolde

Abstract

In this paper we estimate gravity models to see whether trade volumes of countries in the MENA region are significantly lower than what would be expected given their economic, cultural and geographical characteristics. Our empirical results show that the variables used in standard gravity models cannot explain a significant part of MENA's trade performance, particularly on exports. We then go on to 'augment' the standard gravity model with relevant variables from the World Bank's Business Enterprise surveys. Our results further show that these variables, and in particular transport constraints and inefficiencies in customs clearance processes, are important in explaining the MENA region's underperformance in trade.

Suggested Citation

  • Rina Bhattacharya & HirutWolde, 2010. "Constraints on Trade in the MENA Region," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 65(3), pages 251-272, September.
    • Handle: RePEc:usg:auswrt:2010:65:3:251-272
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    References listed on IDEAS

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    Citations

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    Cited by:

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    2. Karam, Fida & Zaki, Chahir, 2019. "Why Don’t MENA Countries Trade More? The Curse of Deficient Institutions," The Quarterly Review of Economics and Finance, Elsevier, vol. 73(C), pages 56-77.
    3. Hosny, Amr, 2020. "What is the Cost of Political Instability in Tunisia? Evidence from 592 Private Firms," African Journal of Economic Review, African Journal of Economic Review, vol. 8(3), November.
    4. Dalila Chenaf-Nicet, 2020. "Dynamics of Structural Change in a Globalized World: What Is the Role Played by Institutions in the Case of Sub-Saharan African Countries?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(4), pages 998-1037, September.
    5. Amr Hosny, 2018. "Firm Performance and their Perception of Political Instability in Egypt: Evidence from an Endogenous Treatment Regression Model," Journal of African Development, African Finance and Economic Association (AFEA), vol. 20(2), pages 61-68.
    6. Mario Mansour, 2015. "Tax Policy in MENA Countries: Looking Back and Forward," IMF Working Papers 2015/098, International Monetary Fund.
    7. Ahmad A. Al-Majali & Radi M. Adayleh, 2018. "International Competitiveness in Services in Some Middle East and North Africa Countries Using Gravity Model," International Review of Management and Marketing, Econjournals, vol. 8(2), pages 53-62.
    8. Jean-Pierre Chauffour & Bernard M., 2013. "Harnessing Trade Opportunities in the Middle East and North Africa," RSCAS Working Papers PP2013/07, European University Institute.
    9. Hosny Amr, 2017. "Political Stability, Firm Characteristics and Performance: Evidence from 6,083 Private Firms in the Middle East," Review of Middle East Economics and Finance, De Gruyter, vol. 13(1), pages 1-21, April.
    10. Houcine Boughanmi & Fatma Al-Saadi & Lokman Zaibet & Ibtisam Al Abri & Abdallah Akintola, 2021. "Trade in Intermediates and Agro-Food Value Chain Integration: The Case of the Arab Region," SAGE Open, , vol. 11(1), pages 21582440211, March.
    11. Sekkat, Khalid, 2012. "Manufactured Exports and FDI in Southern Mediterranean Countries: Evolution, determinants and prospects," CEPS Papers 6849, Centre for European Policy Studies.
    12. Saibal Ghosh, 2022. "Firm Performance and Productivity: Is Labour an Obstacle?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(3), pages 709-728, September.
    13. Güzin Bayar, 2018. "Estimating export equations: a survey of the literature," Empirical Economics, Springer, vol. 54(2), pages 629-672, March.
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    15. Bektasoglu, Beyhan & Befus, Tanja & Brockmeier, Martina, 2012. "Moving towards EU or MENA? Comparing Alternative Turkish Foreign Policies Utilizing the GTAP framework," Conference papers 332279, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • F1 - International Economics - - Trade
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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